Allen v. McRae's, 39 N.C. 325, 4 Ired. Eq. 325 (1846)

June 1846 · Supreme Court of North Carolina

39 N.C. 325, 4 Ired. Eq. 325

WILLIAM ALLEN, Adm’r. &c. vs. DUNCAN McRAE’S, Adm’r. & AL.

Ill a suit fur redumption, ail absolute deed Is not conclusive, but it can be shewn to be a mortgage by some admissions of the defendant in his answer, or by a chain of circumstances, that render it almost as certain, that it was intended as a security, as if it had been expressed in the deed: such as the disparity between the sum advanced and the value of the property — the continued possession of the former owner — written admissions, for example, in stating accounts as for mortgage money. But there is no case, in which relief has been given, upon mere proof by witnesses of declarations by the party, in opposition to tbe deed and tbe answer.

Cause removed to this Court by consent from the Court of Equity of Anson County, at the Spring Term, 1845.

This is a bill to redeem a mortgage, and for an account. It was hied the 13th of January, 1843, and it states: That in 1822, Dennis Ingram obtained a grant from tbe State for a tract of land, containing 20 acres situate on Pedee river, which was then in the adverse possession of C. Watkins and G. Colson, and was of the value of about $300 ; that, being insolvent, Ingram was unable to give security for the prosecution of an ejectment, or to raise money to defray the expenses of the suit, without mortgaging the land ; and, that in order to induce Duncan McRae to become surety in the premises, be agreed to convey the land to him as a security against any loss he might incur by becoming surety for tbe prosecution of the suit, or for any money he might expend or become in any maimer bound for in and about the suit; That accordingly a deed of conveyance was made in the year 1823 by Ingram to McRae, and that the same was Intended and understood by both of the parties to be in trust, solely for the purpose aforesaid. The bill states, that the plaintiffs arc ignorant, whether the deed contained any declaration of trust, or proviso for redemption and charges, if it did not, that it was omitted either by mistake or inadvertence, or by the fraudulent contrivance .of McRae — for that the same was fully intended to be inserted. The bill then stal es, that no money was paid by McRae, or secured to he paid, or other property exchanged for the land so conveyed ; but that the only consideration therefor was the liabilities to be incurred by him as Ingram’s surety as aforesaid : That an ejectment was then brought a,gainst Williams and Colson, on' the demise of Ingram, for the prosecution of which, McRae was surety, and that it was prosecuted by Ingram exclusively as his own suit throughout, he employing counsel, binding himself to pay their fees, and doing all the other acts usually done by those who prosecute suits for their own benefit; and that McRae became liable only for parts of the fees of counsel and other expenses, not exceeding in amount $300, as Ingram’s surety, and in j;hat character paid them : That in 1830 a recovery was finally effected in the action, and a writ of possession is* sued; and that before the execution, viz, on the 13th day of September 1836, McRae procured Ingram to execute fo him another deed, reciting that he had, by the deed dated May 30th, 1823, conveyed this land to him in fee simple, and conveyed the land and confirmed the same in fee: That this secqnd deed contains no condition or defeazance, and declares no trust; but, nevertheless, that it was then expressly agreed or understood, that it should have no other effect or operation than the former one : that it was executed without any new consideration, (though the sum of $1Q is falsely stated therein to have been paid as the consideration,) except that at the same time McRae became security fqr Ingram in a bond for $100, to a gentleman who had been of counsel in the fsuit, and that the reason for giving that deed was only because the parties supposed the first deed was void, on account of its being made when Ingram was out of possession of the land, and others held adversely to him: That in fact the last deed, as well as the first, was intended only as a security for the money paid or that might be paid by McRae for Ingram, and that the omission of a clause of redemption happened by mistake ■or accident, or by the fraudulent design of McRae : And, besides the other circumstances as already mentioned, the bill further states, in support ofi that allegation, that, on the same day, Sept. 13th, 1830, McRae accepted a power of attorney from Ingram to receive possession of the land in Ingram’s name and stead, and “ to settle and compromise as he thought proper for the mesne profits of the said land or sue for the same in Ingram’s name, and apply the same when received to the payment of the expenses and charges of the suit about said landsAnd that, in pursuance thereof, McRae, Watkins and Colson, referred the amount of damages to arbitrators, and McRae acted therein “ as agent of Dennis Ingram,” and then declared to the arbitrators, and also to divers persons at other times, “ that the land be-, longed to Ingram, and that he, McRae, held it only as a surety for the money he had advanced for Ingram in prosecuting the suit, and that in the same way he only claimed to retain as much of the rents and profits, as would discharge his advances and liabilities aforesaid.”

The bill then insists, “ that, if the deed of September 13th, 1836, was intended as a release of Ingram’s equity of redemption, the same could not in equity so operate because there was no adequate, and, in truth, no consideration for it.” And it states that Ingram was so poor as not to be able to assert his rights against McRae, and was needy and dependent upon McRae, so as to be compelled to submit to his demands. It then states the entry of McRae into the land, and an award in March for the mesne profits ; the death of McRae in 1837 intestate — ■ the grant of administration of his intestate to two of the defendants, and the receipt by them in 1837 and early in 1838 of the $890 and interest — the death of Dennis Ingram subsequently in 1838 intestate, and administration granted of his estate to the plaintiff, Allen; and that the other plaintiffs are his heirs at law. The land was sold by a decree of the Court of Equity upon a bill by McRae’s heirs at law for the purposes of partition, and was purchased by Daniel McRae at the price of $18 per acre. The hill is brought by the heirs and administrator of Ingram against McRae's heirs and administrator, and against Daniel McRae, and prays redemption of the land and a re conveyance to the heirs and an account of the profits since Duncan McRae entered, and also an account of the sums received for the mesne profits and how the same have been applied, and payment of the residue of them to Allen, the administrator.

The answer admits that Ingram was poor, and that during the pendency of the suit, or the greater part of the time, he was dependent upon and chiefly supported by McRae. They state that the defendants have no personal knowledge of the transaction, but that they believe that the'agrecment between McRae and Ingram was not for a conveyance of the land as a security against loss by McRae by becoming Ingram’s surety, but was for an absolute purchase, with the risk on McRae’s part of losing all the costs and expenses in the suit in case of failure, as the laud could only be recovered by suit, and, from Ingram’s insolvency, the whole responsibility was in fact on McRae, although the proceedings were in Ingram’s name. The defendants say, that they found their belief as to the nature of the agreement on several circumstances : That McRae would not have incurred the risk of tlie costs and expenses, and the trouble of the tedious litigation without having any interest in the subject, as would be the case, if he was to have a mortgage only as security, not for other demands against Ingram, but for those arising out of the suit for the land; since in case of failure, he would be liable for all those sums, without any recourse whatever. And that the deed which was made on the 30th of May, 1823, is absolute in its terms, as a conveyance in fee: And, further, that, at the time of the execution of the said deed, McRae gave to Ingram his covenant in the following words: “ May 30th, 1823. This is to certify that this day Dennis Ingram has made me a deed to 20 acres of land in Colson’s Island, which said land is now under some embarrassment by being in the possession of Colson and Watkins. Now, if the said land should be recovered, and I obtain a lawful and peaceable possession, I will be accountable to said Dennis on settlement for the sum of three hundred dollars, but am to be allowed all reasonable expenses that may ensue on the same: 20 acres at $ 15 per acre.” The defendants say they believe the said covenant was given for the price agreed to be given for the land, and that it was fully the value thereof at the time, as it was situated. The answers admit that Ingram attended to the suit, but say that McRae did also, and that he alone advanced the sums to defray the expenses, and was indeed the only person really responsible for them. They deny that, to their knowledge or belief, there was any agreement or understanding between the said parties on the 13th of Sept. 1836, or before or afterwards, touching the deed of that date, that it should be different from what it was on its face, or that the same was not absolute; and they say that they are informed and believe that it was given after the recovery in the ejectment, from the apprehension of the first being defective by reason of the adverse possession, and expressly, if it should bo so, to supply the defect and confirm the land to McRae absolutely in fee: and the defendants insist on the deed as being conclusive on its face of the nature of the agreement and transaction between the parties. The answers admit the power of attorney from Ingram to McRae on the 13th of September 1836, the reference and the award as stated in the bill, and also the deaths of McRae and Ingram, and administrations on their estates at the periods mentioned, and the receipt hy McRae’s administrators of the sum awarded between the don!lx of MeRae and that of Ingram. The defendants insist, that the money belonged to McRae as he was, as between him and Ingram, the owner of the land, though he had to use Ingram’s name to recover the land and the mesne profits, ■and to enable him readily to do so, was the only motivé for making the power of attorney ; and though not bound-in law therefore, that McRae, in consideration of the1 large sum that would probably be'recovered for the mesne profits,, agreed to pay thereout costs and expenses of the suit, over and above the purchase money. And in respect of the sum so received by the administrators of McRae after his death for the mesne profits, those defendants insist that, if the said Ingram wras entitled thereto at all, it was as for money had and received to his use, and that therefore he and his administrator could have had an action at law, and therefore ought not to proceed for the same in this Court j and they further insist, in respect thereof, upon the statute of limitations,, barring actions of account and on the case within three-years, as a bar to the plaintiff’s bill,

Winston and Mendenhall, for the plaintiff

Strange, for the defendant.

Ruffin, C. J.

The two deeds are- exhibited and'their date and contents are as stated in the pleadings. That of the 30th day of May, 1823, is expressed to be for the eonsideixition of §300 then paid, and is for the fee unconditionally, and with covenants of general warranty and quiet possession. That of September 13th, 183G, recites that Ingram by deed conveyed the land to McRae on the 30th of May, 1823, and “ that the same had been in contest for many years with C. Watkins and others, and has-been recovered by judgment of the Supreme Court, and a writ of possession is now to issue and to be executed for the benefit of said McRae,” and then it witnesses,, “that the said Dennis, in whose name said suit has been carried on, and said writ is to be issued, in consideration of the premises and of the sum of $10 in hand paid to him by said McRae, hath granted, bargained, sold and confirmed, and doth grant, bargain and sell, and now actually confirm the said land to the said McRae and his heirs : And the said Dennis doth authorize and empower said McRae to have the said writ of possession sued out and executed in said Ingram’s name,, and the possession of said land to be delivered to him by'the sheriff of Anson, and when so delivered, the said McRae is to retain and hold the same to himself and his heirs in his, the said McRae’s own right.”

The power of attorney is of the same date, and authorizes McRae to sue out a writ of possession, “ for a tract of land recovered in my name against C. Watkins and others, on Pedee, and containing about 20 acres, and to have said writ executed in my name, for said McRae to take actual possession of said tract and retain the same ; and also to settle and compromise, as he may deem proper, for the mesne profits of the said land, or sue and recover the same in my name, and apply the same, when recovered and received, to the payment and expenses and charges of the suit about said land. And the said McRae is hereby empowered to do all acts necessary to be done about recovering and taking possession of the said land and receiving and settling for the mesne profits.”

The plaintiff examined a gentleman of the bar, who conducted the action of ejectment against Colson and Watkins, and who states that in July 1823, McRae and Ingram applied to him to bring suit for the land, and that McRae then showed him the deed from Ingram, and said he had taken it “to make himself safe,” or “to save himselfthat the witness brought the suit on the demise of Ingram, and it pended in various Courts until June 1836, when the plaintiff recovered ;■<That,: after . the -recovery, the witness advised McRae to take another deed, which Ingram agreed to give, and that the witness prepared the deed and power of attorney, bearing date September 13th, 1836, and.Ingram executed them and the witness attested them. At that time, the witness took anote from Ingram and McRae for $100, as a fee in the suit, but Ingram was known to be insolvent and the note was paid'by McRae’s administrator. McRae, pending the suit, had paid the witness $120 on account of the fee, and also to two other gentlemen of the bar $160 as •a fee — as the case was one of much 'doubt and had become of consequence to the parties, by the accumulation of a large amount of costs. He states that he relied on McRae almost entirely for the management of the suit, and that he attended to it throughout.

The sheriff of Anson states, that when he put McRae in possession about the middle of Sept. 1836, he then mentioned to him, that after all the trouble in law, Ingram would get nothing, but that he, McRae, would get it and all the profit, and that McRae replied, “ that there would be a good deal coming to Dennis, but there was a long settlement to make, and his lawyers’ fees and expenses in attending Court were to come out of "them.”

Another wetness states, that Ingram owed him a debt, and in March 1887 lie applied to McRae to settle it, and McRae replied, " Ingram owes me about $100, and also for what I have paid as lawyers’ fees and expenses about $400 more ; and that they had not yet settled, but expected to do so before long; and I wish you would come when we settle, for after paying me there will be a balance going to Dennis, sufficient to pay his debts, unless he owes more than I think.” McRae also said he thought he ought to have something for his own trouble. He died about a month after the conversation.

Another witness, Barnawell, states, that, about a month before McRae’s death, Ingram told McRae he wished their business arranged; that he wished the land sold and whatever he owed McRae paid out of the proceeds; and that McRae answered, that whatever remained after paying the debt to him belonged to Ingram. McRae also said he had paid all the expenses of the suit, and Ingram had not paid a dollar. Ingram stated that he intended to give McRae $100 extra for his services. McRae made no further reply.

The defendants exhibited the covenant of McRae of May 20th, binding himself to pay Ingram $300, for the land upon being let into possession. It is of the tenor before set forth.

They also proved by another gentleman of the bar, that, after the action of ejectment had been pending a considerable time, Ingram applied to him to appear for him, and the witness assented, provided the fee was secured. Ingram then said he had sold the land to McRae, who was to pay the lawyers’ fees and the other expenses, and also, in case the land should be recovered, was to pay him $500 for the price of the land. Ingram then requested McRae to be responsible for the fee, but he refused, saying that he would not employ any other lawyer, as he already had employed enough and had paid or agreed to pay more fees than the land was worth. The witness understood from both parties that the contract between them was in writing: That Ingram had made McRae an absolute deed for the land, and McRae had given him a paper to show what he was to pay upon a recovery.

The bill states with great clearness a case for redemption. notwithstanding the conveyance was by an absolute deed. It states a fit occasion for the execution of some deed, as a security from one of the parties to the other; and, besides the direct averment of the intention, that it should operate only as a security, and that it should contain a clause to that effect, and that the omission of such a clause was occasioned by fraud or .accident, it states positively the very material circumstance, that McRae neither paid nor secured any price for the land. Upon that supposition, there would be a strong ground for saying, that the deed was given in the form it was, by surprise and the bill then uses the subsequent events with much skill, in order to shew that they are consistent with the idea, that a security and not a sale was intended. But the misfortune is, that the facts stated in the bill are not all the facts, and that others appear in the answer and proofs, which make a case very different from that which is so well told in the bill. The deed of May 1823 is not only absolute, but it appears to be founded on the consideration of $300 paid ; and, cotemporaneously with the execution of the deed, McRae, who is admitted to be a man of wealth, gave his obligation to Ingram for the sum of $300 therein expressed to be the purchase money for this land, and made payable whenever the purchaser should be let into possession. Of that part of the case the bill takes no notice whatever, but assumes the contrary. One cannot see how it is possible to get over that fact, in pursuing the enquiry, whether that deed was intended to be a security for a debt or b}' way of indemnity for responsibilities about to be assumed by the bargainee for the bargainor, unless it was given colorably for the purpose of deceiving Ingram’s creditors and that is not asserted. The obligation for the price, made at the same time with the deed and attested by the same witnesses, is as conclusive that the transaction was a purchase, as the most direct and credible evidence of the actual payment of the money would be. Nay, more so ; for if the money had been paid, there might have been a doubt, whether it was paid as a price, or advanced as a loan, and then leave the mind uncertain as to the character of the deed. But it is impossible to suppose, that the deed could be executed as a security for a sum to be advanced at an uncertain future day. Such a thing was never done, unless where a person wants an open credit with a banker, and to that end gives a security for all advances to cover whatever balances may be due from time to time. But a needy and insolvent man would never bind his estate with a mortgage upon such terms, though he might sell it to one, who was able and willing to support a law suit for the recovery of it, and agree to wait until the result of the suit for the payment of the price. An absolute deed is not indeed conclusive, that there was an absolute purchase. But it is almost so: and can only be avoided by some admissions of the defendant in his answer, or by a chain of circumstances that render it almost as certain, that it was intended as a security as if it had been expressed in the deed: such as the disparity between the sum advanced and the value of the property — the continued possession of the former owner— written admissions, for example, in stating accounts aá for mortgage money, and repeated and explicit declarations. But there is no case, we believe, in which relief has been given upon mere proof by witnesses of declarations by the party, in opposition to the deed and the answer. Here, there is nothing else, and the declarations themselves, far from being.clear and satisfactory to that point, but rather leading the other way. The bill, indeed, charges a great disparity between the value of the land and the price agreed to be paid. But the plaintiffs do not support that by proof, and it is hardly to be expected they could, as very little land in this State is worth $60 an acre throughout for agriculture. .Besides, the same land, when sold 20 years afterwards, on a credit, for partition, appears to have brought only $18 an acre, and McRae agreed to give $15 and be at much trouble to get it. The expression of McRae, that he took the conveyance from Ingram, “ to make himself safe” oiv “ to save himself” is very unsatisfactory. The witness is uncertain, indeed, which was the expression, and that may be material, for he might have meant, that he had saved a debt by buying the land, which would be consistent with the covenant, that he was “ to be accountable for the sum of $300 in settlement.” Or it might mean, that by buying- the land he had saved himself from the danger of losing what he might advance in the suit, by some other creditor of Ingram selling the land as soon, or even before the recovery. It. would seem scarcely credible, if this had been intended as a mortgage, that the counsel of the parties should not have been able to state it explicitly, or that a respectable member of the profession should have permitted, much less advised the parties — both his clients —that it was proper, after the recovery, that the mortgagor should, without any new consideration, execute a new deed, confirming the title under the former one, as if it were intended to be, as it is, absolute. Both of the parties attended to the suit, because both had an interest in it: McRae to get the land, and Ingram to get the price. The form in which the devise was laid was the only one in which it could have been laid, and therefore proves nothing, as to the intention. Then to another gentleman of the bar, both of the parties stated explicitly, that it was a sale, and indeed they gave an account of the transaction exactly in accordance with that appearing on the papers, except in mistaking the amount of the purchase money. The declarations spoken of byr the other witnesses only shew, that money would be coming to Ingram, which might be either as the price to be paid by McRae, or out of the rents, and do not shew any acknowledgement by McRae, that Ingram was entitled to the land. The only exception is in the testimony of Barnawell, from which it may be collected, there was some confidential understanding between the parties, without our being able to say what it was. But that cannot shake the deeds, and the other consistent circumstances.

It was^argued at the bar, that, even if the transaction was intended to be as the defendants, insist it was, it ought to be relieved against, upon the ground that it was tainted with champerty, and was oppressive on the seller. But to that it must be answered, that no such ground is taken in the bill. As before remarked, the bill states with uncommon precision a case for redemption, as of a mortgage, and coniines itself to that case-Now that is inconsistent with the idea of champerty; for what part of the land is he to have, who only claims a security on it for money actually advanced? The bill alleges no oppression on Ingram or undue advantage taken of him, except in omitting the clause of redemption in the deed, as agreed for; and that is not established. It is true, that in respect of the second deed, the plaintiffs say, that Ingram was in McRae’s power and obliged to submit to his demands. But the bill thus speaks of that transaction, upon the supposition, that, under the first contract, Ingram had a right of redemption, and that the second deed was “ a release of the equity of redemption,” obtained without any consideration. Now, that view wholly fails, if the sale was in. tended to be absolute in the beginning, as it seems clearly to. have been. Then, supposing that the bill might have impeached that dealing upon the ground of champerty, and that the Court of equity would relieve upon that ground merely, yet (he bill has not raised that equity at a.li, and it cannot now be taken. But if it had been raised in the bill, the objection is clearly obviated by the deed of Sept. 1836; for. certainly, when a vendor has actually recovered the land which he had sold when out of possession, there can be no objection to his completing-his contract by’ executing a conveyance that will be valid. There needs no new consideration, because he has already received the price, or, which is the same thing, had it secured. The very purpose of the second deed was to confirm McRae’s title to the land, and entitle Ingram to the purchase money agreed on. There was no longer champerty, if there was at first. Whether 'Ingram has received the purchase money, or may still be entitled to it, is not the subject of enquiry in this suit. He. has other remedy for what may be due on that score. The claim to the sum received for mesne profits as stated in the bill, is incidental to Ingram’s right to the land as mortgagor ; and what is said about the form of the power, is not said with a view to assert a right to that money as an independent right, but for the purpose of proving that McRae did not claim them, and therefore that he had not purchased the land. When he is declared to have purchased the land in 1823, the mesne profits follow the title in this Court, though at law Ingram’s name was necessary to the recovery. So, we regard the power of attorney merely as authorizing the use of Ingram’s name for the benefit of McRae, in respect as well of the profits, as of the land itself — specifying only that McRae is thereout to reimburse himself for his advances in the suit, and not still claim them from Ingram. But, if that were otherwise, and Ingram became entitled to them, they were recovered in his name and received under his authority; then, that is a mere legal demand not incident to the equity of redemption claimed in the bill, and therefore might have been recovered at law. For that reason, this Court ought not to take jurisdiction of it, after objection distinctly taken in the answer. But if the Court would relieve at all, it cannot in this case, after a lapse of five years between the receipt of the money and the filing of' the bill, and the statute of limitations insisted on in the answer, as to that part of the demand. Hamilton v. Skepard, 3 Murp. 115. Bell v. Beeman, Idem, 273.

Upon the whole, therefore, the plaintiff can have no relief, and the bill must be dismissed with costs.

Per Curiam.

Bill dismissed with costs,